In the recent decades, due to many different factors, including climate change effects towards be warming and lower precipitation, as well as some structural policies such as more intensive harvesting of groundwater and low price of irrigation water, the level of groundwater has decreased in most plains of Iran. The objective of this study is to model groundwater dynamics to depletion under different economic policies and climate change by using a system dynamics approach. For this purpose a dynamic hydro-economic model which simultaneously simulates the farmer’s economic behavior, groundwater aquifer dynamics, studied area climatology factors and government economical policies related to groundwater, is developed using STELLA 10.0.6. The vulnerability of groundwater balance is forecasted under three scenarios of climate including the Dry, Nor and Wet and also, different scenarios of irrigation water and energy pricing policies. Results show that implementation of some economic policies on irrigation water and energy pricing can significantly affect on groundwater exploitation and its volume balance. By increasing of irrigation water price along with energy price, exploitation of groundwater will improve, in so far as in scenarios S15 and S16, studied area’s aquifer groundwater balance is positive at the end of planning horizon, even in Dry condition of precipitation. Also, results indicate that climate change can affect groundwater recharge. It can generally be expected that increases in precipitation would produce greater aquifer recharge rates.

Enhancing the comprehension of alterations in land use holds paramount importance for water management in semi-arid regions due to its effects on hydrology and agricultural economics. Allowing agricultural land to lie fallow has emerged as a technique to decrease water use. This research employs the methodology of system dynamics modeling to evaluate the hydrologic and agricultural economic ramifications of employing the fallowing strategy, which aims to preserve water resources in interconnected socio-hydrologic systems. This strategy is explored across three different crops, focusing on the Mesilla–Rincon Valley (MRV) in southern New Mexico. The study’s timeline spans from 2022 to 2050 with historical background from 1969 and encompasses various dimensions, including water availability, land utilization, and agricultural economics. Three types of crops were selected for the fallowing strategy, including cotton, alfalfa/hay, and chile. For each crop, 2500 acres of it would be designated for fallowing separately in two subsequent years, allowing the land to be cultivated in the third year and recurring such pattern. Simulation findings across scenarios (GFDL, UKMO, and NCAR) indicate that water withdrawals for all crops decreased significantly, ranging from approximately 2.69% to 4.37%. Similarly, agriculture income experienced reductions, varying from around 1.53% to 2.26%. Also, surface water and groundwater withdrawals are represented as percentages. The data illustrate significant reductions in water withdrawals across all scenarios. For instance, in the GFDL scenario, surface water withdrawal decreased by approximately 1.85% for cotton, 2.56% for alfalfa/hay, and 1.58% for chile. Similarly, groundwater withdrawals saw substantial reductions, such as 14.93% for cotton, 20.44% for alfalfa/hay, and 12.62% for chile. These numbers emphasize the urgent need for sustainable water management practices to address the challenges posed by reduced water availability.